Long-Term Care Pharmacy Joint Venture May Violate Anti-Kickback Laws: OIG Issues Advisory Opinion 11-03


On April 14, 2011, the U.S. Department of Health and Human Services Office of Inspector General (OIG) posted OIG Advisory Opinion No. 11-03, concluding that a pharmacy employee's joint ownership of a long-term care pharmacy with long-term care facility owners may generate kickbacks in violation of the federal anti-kickback statute.

In the proposed arrangement, the sponsoring pharmacy would be a long-term care pharmacy providing products and services to skilled nursing facilities, intermediate care facilities, assisted-living facilities and residential care facilities. The sponsoring pharmacy's employee would create a joint venture with one or more of the sponsoring pharmacy's long-term care facility owner customers ("Facility Owners") to own a new long-term care pharmacy. The Facility Owners would each receive shares in proportion to their capital investments. The employee would also receive shares for a nominal price, and the new long-term care pharmacy would pay dividends and distributions in proportion to ownership.

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Published In: Administrative Agency Updates, Antitrust & Trade Regulation Updates, Business Organization Updates, Health Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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